Financial Results for the Second Quarter Ended April 30, 2017
[Japan GAAP] (Consolidated)
Date:

June 2, 2017

Company Name and Code:

Tomoe Engineering Co., Ltd. and Subsidiaries - 6309
(URL: http://www.tomo-e.co.jp/index_e.html)

Stock exchange listing:

1st Section, Tokyo Stock Exchange

Head Office:5-15, Kitashinagawa 5-chome, Shinagawa-ku, Tokyo, Japan

President:

Hitoshi Yamamoto

Investor Relations Contacts:

Toshiaki Yakura, Director, General Manager of Accounting Division, Tel: (03) 3442-5127

Date to report Quarterly Consolidated Financial Statement: June 13, 2017
Date for Dividend Payment:

July 4, 2017

Preparation of Supplementary Explanatory Materials for Quarterly Operating Results: Yes
Briefing Session for Quarterly Operating Results: Yes (for institutional investors)* Any fractional sums less than one million (or one thousand) yen are disregarded
1. Consolidated Financial Data for the Second Quarter Ended April 30, 2017
(1) Results of Operation (Consolidated)

Quarter Ended April 30, 2017
Quarter Ended April 30, 2016

(Percent: Change from the same quarter of the previous year)
Net Sales
Operating Income
Ordinary Income
Millions ofMillions ofMillions of
Yen
Percent
Yen
Percent
Yen
Percent
19,599
-1.3
1,067
16.2
1,046
32.6
19,847
-1.2
918
-1.7
789
-32.0

Quarter Ended April 30, 2017
Quarter Ended April 30, 2016

Net Income Attributable to
Owners of the Parent
Millions of
Yen
Percent
668
32.1
505
-45.2

Net Income per Share

Fully Diluted Quarterly
Net Income per Share

Yen
66.98
50.69

Yen
-

(Note) Comprehensive income
Second Quarter ended April 30, 2017: 924 million yen (245.2%)

Second Quarter ended April 30, 2016: 267 million yen (-77.2%)(2) Financial Condition (Consolidated)

Quarter Ended April 30, 2017
Year Ended October 31, 2016

Total Assets (A)(Millions of Yen)
35,20434,792

Net Assets (B)(Millions of Yen)
25,87525,173

Net Assets Ratio(B) / (A) (Percent)
73.5
72.4

(Reference) Net assets
Second Quarter ended April 30, 2017: 25,875 million yen

Year Ended October 31, 2016: 25,173 million yen

2. Dividend Status(Record Date)
Year Ended October 31, 2016
Year Ending October 31, 2017
Year Ending October 31, 2017 (Prospect)First
Quarter-Interim
Term
22.50
22.50

Annual Dividend (Yen)Third
End ofQuarter
Fiscal Year
22.50

(Note) Revisions since the most recently released dividend projection: None

-

22.50

Annual45.00
45.00

3. Forecast for Earnings for the Year Ending October 31, 2017 (Consolidated)(Percent change from the previous Full Business Year)Net Sales
Operating Income
Ordinary Income(Millions of Yen) (Percent) (Millions of Yen) (Percent) (Millions of Yen) (Percent)
Full Business Year40,400
3.1
1,790
-9.1
1,780
-0.0
Net Income Attributable to Net Income per ShareOwners of the Parent(Millions of Yen) (Percent)
Yen
Full Business Year
1,180
21.8
118.25(Note) Revisions since the most recently released dividend projection: None
Notes(1) Significant changes in subsidiaries during this period (changes in specific subsidiaries involving changes in thescope of consolidation): None
Number of new subsidiaries: __(Company names):
Number of eliminated subsidiaries: __(Company names):(2) Adoption of simplified accounting method and the specific accounting method: None
(3) Changes of the principles, procedures, and representation of the accounting policies
1) Change due to revision of accounting standard: Existing2) Other changes than the above 1): None
3) Change in accounting estimates: None
4) Retrospective restatements: None
For more information, please refer to the supporting document on page 10, (4) [Notes on Quarterly
Consolidated Financial Statements (Changes in accounting principles)] of 2 [Quarterly Consolidated Financial
Statements and Notes].
(4) Number of outstanding shares (Common stock)1) Number of outstanding shares as of quarter-end and year-end (including treasury stocks)
At April 30, 2017: 10,533,200 shares

At October 31, 2016: 10,533,200 shares

2) Number of treasury stocks as of quarter-end and year-end
At April 30, 2017: 554,817 shares

At October 31, 2016: 554,667 shares

3) Number of average shares (accumulated quarterly total)
At April 30, 2017: 9,978,455 shares

At April 30, 2016: 9,978,533 shares*The quarterly earnings report is exempt from the quarterly review procedure.
*Explanations for appropriate use of the earnings forecast and other special instructions
The forward-looking statements such as a forecast of our financial results described herein are based on theinformation currently available to us and certain assumptions that we believe are reasonable. Actual results could
differ materially due to various factors. Please refer to the Financial Results for the Quarter (Attachments) on page 3,(3) [Analysis of Future Forecast on Consolidated Earnings Forecast] of 1. [Qualitative Information on Quarterly
Consolidated Operating Results] for the operating results forecast.

Table of Contents (Supporting Data)

1. Qualitative Information on Quarterly Consolidated Operating Results...................................................................2(1) Analysis of Operating Results................................................................................................................................2(2) Analysis of Financial Condition..............................................................................................................................3(3) Analysis of Future Forecast on Quarterly Consolidated Earnings Forecast.......................................................3
2. Quarterly Consolidated Financial Statement and Notes.................................................................................................4(1) Quarterly Consolidated Balance Sheet. ................................................................................................4(2) Quarterly Consolidated Statements of Income & Quarterly Consolidated Statements of Comprehensive
Income......................................................................................................................................6
Quarterly Consolidated Statements of Income.....................................................................................................6
Quarterly Consolidated Statements of Comprehensive Income.........................................................................7(3) Quarterly Consolidated Statements of Cash Flows………………………………………………..8(4) Notes on Quarterly Consolidated Financial Statements……………………………………………………..10(Note for premise of going concern)……………………………………………………………...10(Notes for significant changes in shareholder’s equity)…………………………………………...10(Changes in accounting principles) …………………………………………………………………………...10(Segment information) ………………………………………………………………………………...11
3. Overseas Net Sales (Supplemental Information)...................................................................................................121

1. Qualitative Information on Quarterly Consolidated Operating Results(1) Analysis of Operating Results
During the consolidated second quarter under review, Japan’s economy continued on a gradual recovery trend,
owing to a pickup in personal consumption, ongoing growth in exports, steady capital investment, and a shift topositive inventory investment. Overseas economies also remained firm as a whole, in the context of an ongoing
gradual expansion of the US economy, the sustained recovery of European markets, and the underlying strengthof the Chinese economy.
Given these circumstances, net sales for the Tomoe Engineering Group for the consolidated second quarterslipped 1.3% from the same period last year to 19,599 million yen mainly because of decreasing sales in both
the Machinery & Equipment Business and Chemical Products Business. On the other hand, from an earnings
aspect, operating income was 1,067 million yen, 16.2% up from the same period last year because of higher profit
in both the Machinery & Equipment Business and Chemical Products Business, while ordinary income came to
1,046 million yen, 32.6% up from the same period last year because foreign exchange losses were lower. Profit
attributable to owners of the parent was 668 million yen, 32.1% up from the same period last year.
Operating results by segment were as follows.
(Machinery & Equipment Business)
In the Machinery & Equipment Business, net sales of machinery, components and repair services for overseas
markets increased, but net sales of machinery, equipment and works, and components and repair services fordomestic public sector demand, and net sales of machinery, equipment and works for domestic private sector
demand decreased. As a result, net sales for consolidated cumulative second quarter were 4,810 million yen,
3.8% down from the same period last year.
From an earnings aspect, operating income was 258 million yen, 120.2% up from the same period of the prior year,
mainly because of increased profit from components and repair services for overseas markets, and improved
profitability in sales for domestic public sector demand.
(Chemical Products Business)
In the Chemical Products Business, net sales of materials for housing and construction applications in the industrial
materials sector and net sales of transport trays for semiconductor manufacturing applications in the electronics
materials sector were robust, and the Shenzhen plastic compounding business exhibited a recovery trend, but net
sales of resin raw materials in the domestic plastics sector, UV curing resin and flame retardant in the fine chemicals
sector, and ceramics products for semiconductor fabrication equipment in the advanced materials sector, all declined.
As a result, net sales for consolidated cumulative second quarter were 14,788 million yen, 0.4% down from the same
period last year.
With respect to earnings, operating income was driven by the growth in net sales for products in the industrial materials
sector, which have comparatively high margins, and amounted to 808 million yen, 0.9% up from the same period one
year earlier.

2(2) Analysis of Financial Condition[1] Assets, Liabilities, and Net Assets
Total assets as of the end of the consolidated second quarter under review were 35,204 million yen, up 1.2% or 412
million yen from the end of the previous consolidated fiscal year. This mainly reflected a reduction of 716 million
yen in notes and accounts receivable–trade, an increase of 506 million yen in merchandise and finished goods, anincrease of 373 million yen in electronically recorded monetary claims, and an increase of 203 million yen inguarantee deposit.
Liabilities were 9,329 million yen, down 3.0% or 288 million yen from the end of the previous consolidated fiscal year,
mainly because of an increase of 341 million yen in advances received, a decrease of 260 million yen in income tax
payable, a decrease of 140 million yen in provision for Bonuses.
Net assets stood at 25,875 million yen, 701 million yen or 2.8% up from the end of the previous consolidated fiscal
year. This mainly reflected an increase in retained earnings recorded under quarterly net income attributable toowners of the parent, and an increase in valuation difference on available-for-sale securities.
As a result of the above changes, the equity ratio at the end of the consolidated second quarter under review
increased by 1.1 point compared with the end of the previous consolidated fiscal year to 73.5%.
[2] Cash Flow Status
Cash and cash equivalents as of the end of the consolidated second quarter under review decreased by 1,751
million yen to 6,304 million yen from the end of the previous consolidated fiscal year. The status of eachconsolidated cash flow and their factors during the second quarter are as follows:(Net Cash Provided by (Used in) Operating Activities)
Net cash provided in operating activities was 430 million yen (decreased in cash flow provided by 1,150 million yen
from the same consolidated quarter of the previous year). Income before income taxes was 1,046 million yen, andnotes and accounts receivable-trade decreased by 260 million yen, and advances received increased by 327 million
yen, inventory increased by 697 million yen, and payment of income taxes was 616 million yen.
(Net Cash Provided by (Used in) Investing Activities)
Net cash used in investing activities was 2,029 million yen (increase in cash flow used by 266 million yen from thesame consolidated quarter of the previous year), mainly for the disbursements to time deposits of 1,700 million yen,and payment of guarantee deposits of 200 million yen.
(Net Cash Provided by (Used in) Financing Activities)
Net cash used in financing activities was 224 million yen (the same amount as the consolidated quarter of theprevious year) for the payment of cash dividends of 224 million yen.
(3) Analysis of Future Forecast on Quarterly Consolidated Earnings Forecast
There are no revisions to the consolidated earnings forecast figures for the fiscal year ending October 31, 2017 thatwere announced in the “Notice on changes in earnings forecast” released on April 20, 2017.

3

2. Quarterly Consolidated Financial Statement and Notes(1) Quarterly Consolidated Balance Sheets (Second Quarter)(Thousands of Yen)
End of Previous YearEnd of Second Quarter(October. 31, 2016)(April 30, 2017)

AssetsCurrent Assets
Cash and Deposits

8,056,223

8,004,877

Notes and Accounts Receivable-Trade

11,618,030

10,901,813

Electronically Recorded Monetary Claims

1,702,590

2,075,690

Merchandise and Finished Goods

2,746,735

3,253,587

Work in Process

1,166,982

1,188,623

Raw Materials and Supplies

595,198

758,298

Deferred Tax Assets

500,420

435,105

Others282,133

155,670-4,645-4,703

26,663,670

26,768,964

Allowance for Doubtful Accounts
Total Current Assets
Noncurrent Assets
Property, Plant and Equipment

4,316,576

4,379,898

Accumulated Depreciation-1,592,835-1,644,262

Buildings and Structures, Net

2,723,740

2,735,635

Machinery, Equipment and Vehicles

3,659,243

3,747,875-3,215,574-3,273,127

443,669

474,747

1,931,071

1,930,998

96,763－

983,261

1,039,533-919,694-933,696

63,567

105,836

5,258,812

5,247,218

304,807242,490

Investment Securities

1,149,211

1,320,113

Guarantee Deposits

89,809292,852

1,242,576

1,253,070

Others110,849

107,780

Allowance for Doubtful Accounts-27,664-27,782

Total Investments and Other Assets

2,564,783

2,946,035

Total Noncurrent Assets

8,128,402

8,435,744

Total Assets

34,792,072

35,204,709

Buildings and Structures

Accumulated Depreciation
Machinery, Equipment and Vehicles, Net
Land
Construction in progress
Others
Accumulated Depreciation
Others, Net
Total Property, Plant and Equipment
Intangible Assets
Investments and Other Assets

Net Defined Benefit Assets4

(Thousands of Yen)
End of Previous YearEnd of Second Quarter(October. 31, 2016)(April 30, 2017)

Liabilities and Net Assets
Liabilities
Current Liabilities
Notes and Accounts Payable-Trade

3,667,658

3,649,698

Electronically Recorded Monetary Debt

1,891,465

1,826,118

Accounts Payable-Others

558,442

516,518

Income Taxes Payable

632,403371,780

Advances Received

333,999675,276

Provision for Bonuses

802,914662,597

Provision for Directors' Bonuses

50,352

28,848

Allowance for Product Warranty

107,349

122,356

Others424,583

284,866

8,469,170

8,138,060

Noncurrent Liabilities
Provision for Directors' Retirement Benefits

5,460

5,460

Net Defined Benefit Liabilities

56,13554,7601,087,402

1,131,397

Total Noncurrent Liabilities

1,148,998

1,191,617

Total Liabilities

9,618,169

9,329,678

Capital Stock

1,061,210

1,061,210

Capital Surplus

1,483,410

1,483,410

Retained Earnings

22,833,826

23,279,344-363,591-363,876

Total Shareholders’ Equity

25,014,855

25,460,088

Accumulated Other Comprehensive Income
Valuation Difference on Available-for-Sale
Securities
Deferred Gains or Losses on Hedges

299,418

414,915-17,813683

Foreign Currency Translation Adjustment

90,213

168,693

Total Adjustment on Net Defined Benefit-212,770-169,349

Total Accumulated Other Comprehensive Income

159,048414,942

Total Net Assets

25,173,903

25,875,031

Total Liabilities and Net Assets

34,792,072

35,204,709

Total Current Liabilities

Deferred Tax Liabilities

Net Assets
Shareholders’ Equity

Treasury Stock5(2) Quarterly Consolidated Statements of Income & Quarterly Consolidated Statements of Comprehensive
IncomeQuarterly Consolidated Statements of Income (Second Quarter)(Thousands of Yen)
Second Quarter Ended
April 30, 2016
19,847,846

Second Quarter Ended
April 30, 2017
19,599,063

15,863,415

15,286,201

3,984,431

4,312,862

3,065,857

3,245,634

918,573

1,067,227

Interest Income

3,263

712

Dividends Income

10,166

8,875

Rent Income

3,415

3,415

Others11,991

7,369

28,837

20,373

Interest Expenses

63

9,033

Commission Paid

7,995

7,487

Sales Discount

2,830

2,967

144,664

16,358

2,536

4,808

Total Non-Operating Expenses

158,090

40,655

Ordinary Income

789,321

1,046,945

Income before Income Taxes and Minority Interests

789,321

1,046,945

Income Taxes-Current

362,699

341,679

Income Taxes-Deferred-79,188

36,901

Total Income Taxes

283,511

378,581Net Income or Net Loss (-)

505,809668,363

Net Income or Net Loss (-)

505,809668,363

Net Sales
Cost of Sales
Gross Profit
Selling, General and Administrative Expenses
Operating Income
Non-Operating Income

Total Non-Operating Income
Non-Operating Expenses

Foreign Exchange Losses
OthersAttributable to Owners of the Parent

6

Quarterly Consolidated Statements of Comprehensive Income (Second Quarter)(Thousands of Yen)
Second Quarter Ended

Second Quarter Ended

April 30, 2016
505,809

April 30, 2017
668,363

Valuation Difference on Available-for-sale Securities-120,053

115,496

Deferred Gains or Losses (-) on Hedges-11,915

18,496

Foreign Currency Translation Adjustment-126,11978,48020,062

43,420-238,026

255,894

267,783924,258

267,783924,258

Net Income
Other Comprehensive Income

Net Defined Benefit
Total Other Comprehensive Income
Comprehensive Income(Breakdown)Comprehensive Income Attributable to Owners of the
Parent7

(3) Quarterly Consolidated Statements of Cash Flows(Thousands of Yen)
Second Quarter Ended

Second Quarter Ended

April 30, 2016

April 30, 2017

Net Cash Provided by (Used in) Operating Activities
Income before Income Taxes

789,321

1,046,945

Depreciation and Amortization

199,744

210,754

Increase (Decrease) in Provision for Bonuses(118,697)(142,729)

Increase (Decrease) in Provision for Directors' Bonuses(24,704)(21,504)

Increase (Decrease) in Allowance for Product Warranty(3,337)

15,006

Increase (Decrease) in Net Defined Benefit Liability

4,227(1,867)

Decrease (Increase ) in Net Defined Benefit Asset(20,492)(10,493)

3,654

176

(13,430)(9,587)

63

9,033

157,468

26,749398,929

260,966

Decrease (Increase) in Inventories(66,849)(697,651)

Increase (Decrease) in Notes and Accounts Payable-Trade67,652(34,260)

Increase (Decrease) in Accounts Payable-Others(40,370)(32,506)

Increase (Decrease) in Advances Received

329,270

327,596

Others, Net

90,585

99,772

1,753,037

1,046,400

12,772

9,486

(71)

(9,040)

Income Taxes Returned (Paid)(185,050)(616,439)

Net Cash Provided by (Used in) Operating Activities

1,580,688

430,406

Increase (Decrease) in Allowance for Doubtful Accounts
Interests and Dividends Income
Interest Expenses
Foreign Exchange Losses (Gains)
Decrease (Increase) in Notes and Accounts
Receivable-Trade

Sub TotalInterests and Dividends Income Received
Interest Expenses Paid8

(Thousands of Yen)
Second Quarter Ended

Second Quarter Ended

April 30, 2016

April 30, 2017

Net Cash Provided by (Used in) Investment Activities(1,700,000)(1,700,000)(23,758)(119,629)-

900

Purchase of Intangible Fixed Assets(20,597)-

Purchase of Investment Securities(8,569)(8,745)

Payments of Loans Receivable

(510)

(660)

Collection of Loans Receivable

2,567

750

Guarantee Deposits (Increase)(11,894)(200,524)(323)(1,754)

1,763,086(2,029,663)

-

(285)

Cash Dividends Paid

(224,516)(224,516)

Net Cash Provided by (Used in) Financing Activities(224,516)(224,802)(124,078)

72,714Net Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Period(530,993)
5,295,280(1,751,345)
8,056,223

Cash and Cash Equivalents at End of This Quarter

4,764,286

6,304,877

Disbursement to Time Deposits
Purchase of Property, Plant and Equipment
Proceeds from Sales of Property, Plant and Equipment

Others, Net
Net Cash Provided by (Used in) Investment Activities
Net Cash Provided by (Used in) Financing Activities
Purchase of Treasury Stock

Cash and Cash Equivalents
Effect of Exchange Rate Change on Cash and Cash
Equivalents9(4) Notes on Quarterly Consolidated Financial Statements(Note for premise of going concern)
There are no pertinent matters to report.
(Notes for significant changes in shareholder’s equity)
There are no pertinent matters to report.
(Changes in accounting principles)
Beginning from the first quarter consolidated accounting period, the Company has applied the Implementation
Guidance on Recoverability of Deferred Tax Assets (Accounting Standards Board of Japan Financial AccountingStandards Implementation Guidance No. 26; referred to below as the Recoverability Implementation Guidance), andhas partially revised the method of accounting treatment concerning the recoverability of deferred tax assets.
In applying the Recoverability Implementation Guidance, the Company has added the difference between the amountof deferred tax assets and deferred tax liabilities when it applied the provisions corresponding to paragraph 49 (3) ①
through ③ of the Recoverability Implementation Guidance at the beginning of the first quarter consolidated
accounting period, and the amount of deferred tax assets and deferred tax liabilities at the end of the priorconsolidated fiscal year, to retained earnings at the beginning of the first quarter consolidated accounting period, in
accordance with the transitional treatment provided in paragraph (4) 49 of the Recoverability Implementation
Guidance.
The effect of this change on the reported amount at the beginning of the first quarter consolidated accounting period is
not material.

10

(Segment Information, etc.)
Second Quarter Ended April 30, 2016
Information Pertaining to the Amount of Net Sales or Net Loss of Each Reporting Segment(Thousands of Yen)
Reported Segment

Net Sales
Net Sales to UnaffiliatedCustomers
Internal Net Sales among
Segments or AmountTransferred
Total
Segment Profit

Machinery & Equipment
Business

Chemical Products
Business

5,002,381

14,845,465

19,847,846

19,847,846

-

-

-

-

5,002,381

14,845,465

19,847,846

19,847,846

117,492

801,081918,573

918,573

Total

Grand Total(Note) The total amount of segment profit is identical to the operating income reported on the Quarterly Consolidated Statements of Income.

Second Quarter Ended April 30, 2017
Information Pertaining to the Amount of Net Sales or Net Loss of Each Reporting Segment(Thousands of Yen)
Reported Segment

Net Sales
Net Sales to UnaffiliatedCustomers
Internal Net Sales among
Segments or AmountTransferred
Total
Segment Profit

Machinery & Equipment
Business

Chemical Products
Business

4,810,117

14,788,946

19,599,063

19,599,063

-

-

-

-

4,810,117

14,788,946

19,599,063

19,599,063

258,686

808,541

1,067,227

1,067,227

Total

Grand Total(Note) The total amount of segment profit is identical to the operating income reported on the Quarterly Consolidated Statements of Income.

11

3. Overseas Net Sales (Supplemental Information)
Second Quarter Ended April 30, 2016

(Thousands of Yen)
Asia

I. Overseas Net Sales

Total

2,478,070

545,387

3,023,458--

19,847,846

12.5

2.7

15.2

II. Consolidated Net Sales
III. Ratio of Overseas Net Sales to Consolidated Net Sales (%)

Other Regions(Notes)1. Areas including countries or regions are determined based on their degree of geographical proximity.
2. Main countries or regions included in the areas:(1) Asia: China, Korea, Taiwan, Thailand and India(2) Other regions: America and Egypt
3. Overseas net sales are sales of our company and subsidiaries made in countries and regions other than Japan.
Second Quarter Ended April 30, 2017

(Thousands of Yen)
Asia

I. Overseas Net Sales
II. Consolidated Net Sales
III. Ratio of Overseas Net Sales to Consolidated Net Sales (%)

Other Regions

Total

2,851,616

662,416

3,514,033--

19,599,063

14.5

3.4

17.9

(Notes)1. Areas including countries or regions are determined based on their degree of geographical proximity.
2. Main countries or regions included in the areas:(1) Asia: China, Korea, Taiwan, Thailand and Vietnam(2) Other regions: America and Egypt
3. Overseas net sales are sales of our company and subsidiaries made in countries and regions other than Japan.

12